Taiko Research Report: Ethereum Layer 2 solution that achieves seamless expansion and full compatibility

1. Project Introduction

Taiko is a decentralized Ethereum equivalent zkRollup project designed to extend Ethereum through zkEVM technology.

Taiko aims to be a fully equivalent zkRollup to Ethereum in order to scale Ethereum without changing existing decentralized applications (dApps). As a fully equivalent zkRollup to Ethereum, Taiko allows developers and users to leverage the power of Ethereum Layer 1 (L1) without changing existing dApps.

Main features:

1. ZkEVM type 1 fully compatible with EVM: Type 1 zkEVM used by Taiko is fully compatible with Ethereum, allowing developers to Migrate dApps between Ethereum and Taiko without worrying about smart contract failure.
2. Open Source: All Taiko’s source code can be viewed, built, or edited on GitHub, enabling blockchain development not only to be limited to a small team, but also to communities and developers around the world.
3. Full decentralization: In addition to high compatibility with EVM, Taiko also attaches great importance to the decentralization of the protocol, planning to generate zkPs through decentralized proposers and validators submitting blocks and proofs.

2. Core technical structure

2.1 zkEVM circuit

The zkEVM (zero-knowledge Ethereum Virtual Machine) circuit is one of the core components of Taiko’s technical architecture. It utilizes zero-knowledge proofs (ZKPs) to verify the accuracy and integrity of Ethereum Virtual Machine (EVM) calculations. Through zkEVM, Taiko can scale Ethereum without changing existing smart contracts and decentralized applications (dApps), while maintaining Ethereum’s security, decentralization, and compatibility.

2.1.1 Functions and features

1. Zero-knowledge proofs (ZKPs)

Verify transactions: zkEVM circuit uses ZKPs to verify The correctness of the transaction without revealing the specific data of the transaction. In this way, the amount of data processing on the Ethereum mainnet can be reduced, thereby reducing transaction costs and increasing transaction speed.

Confidentiality: ZKPs ensure the privacy of transactions, and only verified proofs will be submitted to the Ethereum mainnet.

2. Fully compatible with EVM opcodes

Supports all EVM opcodes: The zkEVM circuit fully supports all EVM opcodes, which means developers can seamlessly integrate their smart contracts with dApps Migrate to Taiko without any modifications.

Maintain Ethereum compatibility: This high level of compatibility allows existing Ethereum development tools and ecosystems to be used directly on Taiko, greatly facilitating developers.

3. Decentralization and security

Decentralized verification: The zkEVM circuit supports a decentralized verifier model, and anyone can participate in generating and verifying zero-knowledge proofs. This decentralized approach ensures the security and integrity of the system.

Ethereum L1 validator: Taiko’s zkEVM circuit utilizes Ethereum Layer 1 validators for transaction ordering, ensuring that the decentralization and security properties of Ethereum are inherited.

4. Efficient and scalable

Reduced data processing volume: By executing transactions on Layer 2 and generating zero-knowledge proofs, the data processing volume on the Ethereum mainnet is reduced, thereby improving transactions efficiency and scalability.

Fast generation of zk proofs: The zkEVM circuit design optimizes the speed of zk proof generation to ensure that a large number of transactions can be processed efficiently.

5. Smart contracts and protocol rules

Smart contract execution: The zkEVM circuit supports the execution of smart contracts, ensuring the programmability and flexibility of Ethereum. These smart contracts are responsible for validating zk proofs and enforcing the rules of the protocol.

Protocol verification: The zkEVM circuit is integrated with Ethereum L1 to ensure that all proofs and transaction status are strictly verified, maintaining the consistency and security of the system.

2.1.2 Working principle

1. Transaction execution and data collection

The transaction is first executed on Layer 2 to generate corresponding transaction data.

These transaction data will be collected and prepared for zk proof generation.

2. Zero-knowledge proof generation

The zkEVM circuit uses zkSNARKs or zkSTARKs technology to generate zero-knowledge proofs. These proofs can verify the correctness of the transaction without revealing the specific content of the transaction.

After the proof is generated, the proof and related data will be submitted to Ethereum L1.

3. Verification and status update

Ethereum L1 verifier verifies the submitted zero-knowledge proof to ensure the validity of the proof.

Once the proof is verified, the transaction status will be updated on the Ethereum mainnet, ensuring that all participants see consistent transaction results.

2.2Layer 2 Rollup Node

Layer 2 Rollup node is a key component in Taiko’s technical architecture and is responsible for managing and executing transactions on Layer 2 while interacting with Ethereum Layer 1 (L1). Through Layer 2 Rollup technology, Taiko is able to increase Ethereum’s transaction throughput, reduce transaction costs, and maintain decentralization and security.

2.2.1 Functions and features

1. Data collection and transaction execution

Transaction execution: Layer 2 Rollup node is in Layer 2 Transactions are executed on the Ethereum mainnet, which are first processed in the Layer 2 network, reducing the direct burden on the Ethereum mainnet.

Data collection: Nodes collect data transmitted from Ethereum Layer 1, and perform transaction processing and status updates based on these data.

2. Status management

Status display: After each transaction is executed, the Layer 2 Rollup node will update and display the transaction status to ensure that all participants see consistent status information.

State maintenance: Ensure the consistency and data integrity of the entire network by managing the status after transaction execution.

3. Protocol rule execution

Protocol verification: Layer 2 Rollup nodes execute transactions and verification processes according to the rules of the Taiko protocol. These rules ensure the validity of transactions and the security of the network.

Smart contract support: Nodes can execute smart contracts deployed on Ethereum Layer 1 and use these contracts for data transmission and zk proof verification.

4. Efficient and scalable

Improving throughput: By executing transactions on Layer 2, the network's transaction processing capacity is greatly improved and congestion on the Ethereum main network is reduced.

Reduced costs: Processing transactions on Layer 2 can significantly reduce transaction fees, making small transactions more economically viable.

5. Decentralization and security

Decentralized verification: Layer 2 Rollup nodes support a decentralized verifier model, and anyone can participate in transaction verification and zk certificate generation , ensuring the decentralization and security of the network.

Data transmission: The node is responsible for transmitting transaction data on Layer 2 to Ethereum Layer 1, and performing status updates based on feedback from L1.

2.2.2 Working principle

1. Data collection and transaction execution

Receive transactions: The node receives transactions submitted by users on Layer 2 and executes them according to the protocol rules trade.

Status update: After the transaction is executed, the node updates the transaction status and maintains the latest status information on Layer 2.

2. Zero-knowledge proof generation

Generate zk proof: The node generates a zero-knowledge proof for each transaction to ensure the correctness and privacy of the transaction.

Submit proof: The generated zk proof and related data will be submitted to Ethereum Layer 1 for verification by L1 verifiers.

3. Verification and status update

L1 verification: Ethereum Layer 1 verifier verifies the submitted zero-knowledge proof to ensure the validity of the transaction.

State synchronization: Once the proof is verified, the Layer 2 Rollup node will update the status synchronously based on the feedback from L1 to ensure the consistency of the entire network.

Advantages and application scenarios:

1. Improve the scalability of Ethereum

By processing a large number of transactions on Layer 2, Taiko’s Layer 2 Rollup node can significantly increase the scalability of Ethereum. The scalability of the network can meet higher transaction needs.

2. Reduce transaction costs

Execute transactions on Layer 2 and generate zk certificates, reducing dependence on the Ethereum main network, thus reducing transaction costs, especially suitable for high-frequency small-amount transactions application scenarios.

3. Enhance security and privacy

Zero-knowledge proof technology ensures the privacy and security of transactions, avoids the leakage of transaction data, and maintains the decentralized nature of the network. .

2.3Taiko Protocol

The Taiko protocol is also a core component of Taiko’s technical architecture. It defines and executes the rules of Layer 2 Rollup to ensure the correctness of transactions and the security of the network. Through smart contracts and decentralized verification, the Taiko protocol enables efficient scaling of Ethereum while maintaining its decentralized and secure features.

2.3.1 Functions and features

1. Protocol rule definition

Rule settings: Taiko protocol defines all operation rules of Rollup , including transaction processing, verification and status updates, etc. All transactions must follow these rules to ensure the consistent operation of the network.

Smart contract execution: The agreement is implemented through smart contracts deployed on Ethereum, ensuring that all rules and operations are open and transparent.

2. Transaction verification and status update

Transaction verification: After each transaction is submitted, the Taiko protocol will be verified according to predefined rules to ensure the validity and correctness of the transaction.

Status update: After the verification is completed, the protocol will update the transaction status of Layer 2 and transmit the relevant data to Ethereum Layer 1 to ensure that the status is synchronized and consistent.

3. Decentralization and security

Decentralized validator: Taiko protocol supports a decentralized validator model, and anyone can participate in the verification process. This decentralized approach enhances the security and integrity of the network.

Zero-knowledge proof: The protocol uses zero-knowledge proof technology (zkSNARKs or zkSTARKs) to verify transactions without exposing the specific content of the transaction, ensuring the privacy and security of the transaction.

4. Data transmission and processing

Data submission: Transaction data and the generated zk certificate will be submitted to Ethereum Layer 1 for verification by L1 verifiers.

Data processing: After L1 verification, the protocol will update the status of Layer 2 based on feedback to ensure that all participants see consistent transaction results.

5. Smart contract function

Data transfer mechanism: The smart contract is responsible for transferring transaction data and zk proof between Layer 2 and Layer 1 to ensure the integrity and consistency of the data.

Protocol verification: The smart contract is also responsible for verifying the zk certificate to ensure the validity and correctness of the transaction.

6. Governance and community-driven

Decentralized Autonomous Organization (DAO): The governance of the Taiko protocol is managed by the Taiko DAO, which is composed of TKO token holders who vote to Determine significant updates and changes to the Agreement.

Community Participation: The governance and development of the protocol highly rely on the participation and contribution of the community to ensure that the decision-making of the protocol is transparent, fair and inclusive.

2.3.2 Working principle:

1. Transaction submission and execution

The user submits the transaction on Layer 2, and the transaction is first executed on the Layer 2 Rollup node.

After the transaction is executed, the corresponding transaction data and status updates are generated.

2. Zero-knowledge proof generation

Generate zero-knowledge proofs to verify the correctness of transactions. These proofs will not expose the specific content of the transaction and ensure privacy.

The generated zk certificate and transaction data will be submitted to Ethereum Layer 1.

3.L1 Verification and Status Update

Ethereum Layer 1 verifier verifies the submitted zero-knowledge proof to ensure the validity and correctness of the transaction.

After the verification is passed, the status of Layer 2 will be updated based on the feedback from L1 to ensure the consistency and security of the entire network.

4. Governance and protocol updates

Taiko DAO ensures community participation and transparent governance by voting on protocol updates and changes.

All protocol updates will be implemented through smart contracts to ensure the openness and transparency of the rules.

2.3.3 Advantages and application scenarios

1. Improve the scalability of Ethereum

Through Layer 2 Rollup technology and zero-knowledge proof, the Taiko protocol has significantly improved Ethereum The scalability of the network can handle more transactions and meet higher transaction needs.

2. Reduce transaction costs

Processing transactions on Layer 2 reduces dependence on the Ethereum main network, thereby reducing transaction costs, and is especially suitable for application scenarios of high-frequency small-amount transactions.

3. Enhance security and privacy

Zero-knowledge proof technology ensures the privacy and security of transactions, avoids the leakage of transaction data, and maintains the decentralized nature of the network. .

4. Community-driven and transparent governance

Through Taiko DAO, community members can participate in the governance and decision-making of the protocol to ensure that the development direction of the protocol is in line with the interests and needs of the community.

2.4 Based on Competitive Rollup (BCR)

Based on Competitive Rollup (BCR, Base Competitive Rollup) is a key innovation in the Taiko protocol , designed to enhance the decentralization and security of the network. The following is a detailed introduction to BCR:

2.4.1 Core Concept

BCR is an innovative Layer 2 solution designed to improve the decentralization of blockchain networks through competitive mechanisms. Centralization and security. In the BCR model, multiple participants can compete to propose and validate blocks, thus eliminating a single entity’s control of the network.

2.4.2 Working Mechanism

1. Competitive Proposals

Proposers: Anyone can become a proposer and submit a block proposal. Proposers need to package user transactions and generate zero-knowledge proofs (zkProofs).

Proposal competition: Multiple proposers can compete to submit blocks at the same time, ensuring that the generation and submission process of each block is decentralized and there is no single centralized control point.

2. Verification process

Verifiers: Verifiers are responsible for verifying the blocks and zero-knowledge proofs submitted by the proposer. They ensure the security of the network by verifying the correctness and legality of transactions.

Competitive verification: Multiple validators can compete to validate blocks, which increases the security of the network because competition between validators ensures the accuracy and transparency of the verification process.

2.4.3 Advantages of BCR

1. Enhanced decentralization

Open participation: The BCR model allows anyone to participate in block proposals and verifications, eliminating the need for a few entities dependence, enhancing the decentralization of the network.

Censorship Resistance: With multiple proposers and validators competing, it is difficult for any single entity to censor or control the network.

2. Improved security

Multiple verification: Through the competitive verification mechanism, multiple validators independently verify blocks, which ensures the reliability and security of the verification process.

Reducing single points of failure: The BCR model reduces the risk of single points of failure because the operation of the network does not rely on a single proposer or validator.

3. Economic incentives

Fair competition: Proposers and validators receive economic rewards through competition. This mechanism ensures that participants have incentives to provide honest and efficient services.

Fee Burning: The proposer needs to burn a certain amount of TKO tokens to submit the block, which helps control the token supply and stabilize the token value.

2.5 Booster-based rollup (BBR)

Booster-based rollup (BBR, Based Booster Rollup) is a key component of the Taiko protocol, designed to improve transaction execution by and storage efficiency, further expanding the capabilities of the Ethereum network. BBR's design goal is to create a seamless user and developer experience that enables transactions to be executed as if they were on Layer 1 (L1), while maintaining its own storage on Layer 2 (L2).

2.5.1 Core features and working principles

1. Double-layer structure

Separation of execution and storage: BBR realizes transaction execution and storage, this design enables transactions to be efficiently executed on L2 while maintaining necessary security and decentralization on L1.

Seamless integration with L1: Through this dual-layer structure, BBR enables smart contracts to maintain consistent addresses on L1 and all BBRs, simplifying the deployment and interaction process.

2. Compatibility and scalability

Fully compatible with Ethereum: BBR is fully compatible with Ethereum’s existing architecture, including hash functions, state trees and Gas fees for each opcode . This means existing Ethereum smart contracts and dApps can be seamlessly migrated to BBR.

Enhanced scalability: The design goal of BBR is to improve the scalability of Ethereum, making transaction processing faster and cheaper, thereby supporting a larger number of users and applications.

3. Booster function

Versatility: BBR’s booster function can enhance any type of aggregation, whether it is optimistic aggregation or zero-knowledge aggregation, you can take advantage of the extensions provided by BBR ability.

Enhance Ethereum scalability: Through BBR, any rollup can directly enhance the scalability of Ethereum, allowing it to handle more transactions and more complex applications.

2.5.2 Technical details

1. Smart contract consistency

Address consistency: BBR ensures that the smart contract addresses on L1 and L2 are consistent, which means Smart contracts deployed by developers on L1 can be seamlessly run on L2, simplifying the development and deployment process.

Simplified interaction: The interaction process between users and developers at different layers is simplified, ensuring the consistency of user experience and the convenience of the development process.

2. Economic Incentive Mechanism

Fee structure: BBR’s fee structure is reasonably designed to ensure that transaction fees are low enough to encourage users and developers to use it, while ensuring that the network’s economic incentive mechanism is strong enough , to maintain the enthusiasm of validators and proposers to participate.

Reward distribution: Through a reasonable reward distribution mechanism, BBR ensures that all participants receive fair incentives in the network, thereby maintaining the decentralization and security of the network.

2.5.3 Advantages

1. Improve transaction efficiency

Fast transaction processing: By executing transactions on L2, BBR significantly improves transaction processing speed and reduces the number of Ethereum masters. network burden.

Reduced transaction costs: Executing transactions on L2 significantly reduces transaction costs, making small transactions and high-frequency transactions more economically feasible.

2. Enhance network security

Decentralized verification: BBR adopts a decentralized verification mechanism to ensure the security and decentralization of the network and avoid single points of failure and censorship risks.

Multiple verification mechanism: Through the multi-verification mechanism, BBR provides a higher security guarantee to ensure the correctness and legality of all transactions.

3. Optimize user experience

Seamless user experience: BBR’s design ensures that users’ experience is consistent with L1 when using L2 networks, without having to worry about complex technical details.

Easy to develop and deploy: Developers can leverage existing Ethereum tools and infrastructure to easily develop and deploy smart contracts and dApps on BBR.

3. TKO Token

TKO is the native token of the Taiko network, designed to reward block validators and used as a transaction in the Taiko network part of the fee.

3.1 Token Function

1. Transaction Fees: When users conduct transactions on the Taiko Layer 2 network, they are required to pay transaction fees, which will be collected by the block proposer. Block proposers must burn a certain amount of TKO tokens and pay Ethereum validators in ETH to ensure their blocks are included in the Ethereum Layer 1 network.

2. Reward mechanism: TKO tokens are used to reward block validators who ensure the validity of transactions by generating and verifying zero-knowledge proofs (zkProofs). The transparency of TKO tokens ensures that the user experience is similar to that on the Ethereum network.

3. Margin system: TKO tokens are used in the margin system of BCR and BBR to ensure the integrity and timeliness of network operations. Forfeited margin is not lost but redirected to Taiko Treasury at L1.

4. Governance Role: TKO token holders can participate in network governance, influence network upgrades and manage Taiko Treasury, maintaining the permissionless nature of the network on L1 and L2.

3.2 Token Supply

• Total supply: 1 billion TKO tokens with 18 decimal places.

• Token Management: TKO tokens are minted or burned strictly in accordance with governance regulations, ensuring that supply changes are transparent and reflect the consensus of token holders.

3.3 Token Distribution

• ##DAO Treasury: 20%

• Guardian Prover Bonds: 2%

• Grants & RetroPGF: 5%

• Trailblazer Airdrop: 10%

• Protocol Guild Airdrop: 1%

• Genesis Airdrop: Up to 5%

• Liquidity and Market Making: 5%

• Investors: 11.62%

• Taiko Labs/Core Team: 20%

• Taiko Foundation Reserve: 16.88%

• Taiko Official Prover Bonds: 1.5%

3.4 Token Airdrop

1. Testnet interaction:

In order to increase the chance of obtaining TKO token airdrops, users can participate in Taiko’s testnet and interact with its testnet Interact to increase the likelihood of airdrops.

Currently, Taiko has conducted multiple testnets. The latest testnet is Alpha3, which is designed to test the interaction between proposers and validators, as well as the new fee and incentive system.

2. Steps to participate:

Add network: Add the Sepolia network and Taiko’s Alpha3 testnet to your MetaMask wallet.

Get testnet ETH: Get Sepolia ETH from the faucet.

Minting and bridging tokens: Connect your wallet, mint Bull and Horse tokens, and add these tokens to your MetaMask, then bridge ETH, BLL, and Horse from Sepolia to Taiko.

Exchange and provide liquidity: In Taiko’s exchange test, import Taiko’s token list, exchange and provide liquidity for some tokens.

Developer tasks: For users with certain development experience, you can deploy and verify contracts, or build dApps according to the guide.

Complete tasks: Visit Taiko's Galxe page and complete tasks such as transferring money, exchanging funds, visiting pages, or answering quizzes to earn points that may be converted into future rewards.

4. Community and ecosystem development

According to data from Taiko’s official website, more than 90 projects have been integrated into the ecosystem.

These projects cover a variety of sectors, including wallets (with notable EVM native wallets), NFT markets (with single and multi-chain options), infrastructure (e.g. RPC and Oracle services) and DeFi applications. As a Type 1 Layer2 solution, Taiko provides a seamless migration path for Ethereum dApps, requiring little to no adjustment.

In addition, the Taiko team has introduced a test token faucet, an official token and NFT bridge, as well as exchange functionality and a browser.

As of May 23, 2024, Taiko has 933,000 fans on the X (Twitter) platform, while Discord has accumulated 9.094 million members. In comparison, Optimism has 640,000 followers and Arbitrum has 980,000 followers. Taiko's community has shown significant growth and engagement.

5. Team/Financing Situation

5.1 Team

##Taiko team is composed of experienced blockchain experts and engineers. Has a strong background and extensive experience in blockchain technology, cryptography and distributed systems.

Co-founder Daniel Wang was the founder and former CEO of Loopring, a decentralized transaction protocol based on Ethereum that uses zero-knowledge proof technology to expand. As a veteran in the blockchain industry, Daniel has extensive experience in the fields of blockchain technology and decentralized finance (DeFi). In Taiko, Daniel Wang is responsible for overall strategic planning and technical guidance, driving project development and innovation.

Brecht Devos is the co-founder and leader of the zero-knowledge research and development team. He was the former chief architect of Loopring and has a strong background in cryptography and blockchain technology. He has extensive practical experience in zero-knowledge proof technology and blockchain protocol design. At Taiko, Brecht leads the zero-knowledge research and development team, focusing on the development and implementation of zkRollup and zkEVM technologies.

Organizational Structure

In order to ensure the effective operation of the Taiko network and compliance with regulatory requirements, Taiko has established multiple related entities and organizations, among which several key entities play a key role:

• Taiko Lab: A dedicated R&D team focused on advancing the Taiko protocol.
• Taiko Treasury: Funded by revenue generated by the Taiko protocol, the Treasury serves as the financial resource for the project.
• Taiko DAO: This organization consists of holders of Taiko tokens (TKO), exercising voting rights to govern all aspects of the Taiko protocol. This includes decisions about smart contract upgrades, TKO parameters and other protocol-related matters.
• Taiko Foundation: As a legal entity located in the Cayman Islands, the Taiko Foundation oversees the growth and development of the Taiko Protocol and its broader ecosystem. The foundation provides financial support for technology development, ecosystem expansion, maintenance, cooperation with service providers, event management and other initiatives through grants or alternative financing methods exclusively on behalf of Taiko DAO and token holders.
• Taiping Island Security Council: The Security Council is composed of individuals and entities selected by the Taiping Island Affairs Bureau and is responsible for taking prompt action in emergency situations in accordance with the needs of the Taiping Island Protocol. The Security Council's primary mission is to maintain the security and integrity of Taiko, authorizing them to implement upgrades or modifications to achieve this goal.

5.2 Financing

Initial financing and subsequent financing

• Amount: US$22 million

• Time: Including two rounds of financing announced on June 8, 2023

• Investors: Sequoia China and Generative Ventures respectively led and participated Contributors include BAI Capital, GGV Capital, GSR Markets, IOSG Ventures, KuCoin Ventures, Mirana Ventures, OKX Ventures, Skyland Ventures, Token Bay Capital, Yunqi Partners, and other investors and well-known contributors.

Latest financing

• Amount: US$15 million

• Time: March 2, 2024

• Investors: Led by Lightspeed, Faction, Hashed, Generative Ventures and Token Bay Capital, other investors include Wintermute Ventures, Presto Labs, Flow Traders, Amber Group, OKX Ventures , GSR and WW Ventures.

These funds are used for the deployment and optimization of multiple testnets, including Alpha1, Alpha2 and Alpha3 testnets, to verify and improve the network design. Preparing for the mainnet launch at the end of the first quarter of 2024, including infrastructure construction and technical support.

6. Project Evaluation

6.1 Track Analysis

The Taiko project belongs to the Ethereum Layer 2 expansion solution track, specifically the zkRollup technology field. Taiko provides efficient, secure and decentralized blockchain scaling solutions through zero-knowledge Ethereum Virtual Machine (zkEVM) technology, aiming to solve the scalability issues of Ethereum while maintaining full compatibility with Ethereum.

In the field of Ethereum Layer 2 expansion solutions, especially in terms of zkRollup technology, there are several similar projects:

1.zkSync

Introduction: zkSync is a An Ethereum Layer 2 scaling solution based on zkRollup technology, designed to provide fast, low-cost transactions while maintaining the security and decentralization of Ethereum.

Features: Fully compatible with Ethereum, supports smart contracts, focuses on user experience and developer friendliness.

2.StarkNet

Introduction: StarkNet is a Layer 2 extension solution developed by StarkWare based on STARK (Scalable Transparent Argument of Knowledge) technology.

Features: Use STARK technology for zero-knowledge proof, provide high throughput and low-latency transactions, and support complex smart contracts.

3.Loopring

Introduction: Loopring is a zkRollup project focusing on decentralized exchange (DEX) protocols and is committed to providing an efficient trading experience and low fees.

Features: Through zkRollup technology, high-throughput decentralized transactions are achieved to ensure the security and privacy of user assets.

6.2 Project Advantages

1. Permissionless and decentralized: Taiko stands out as a pioneering rollup-based solution by eliminating centralized sequencers and relying on Ethereum validators Transaction and block ordering to stand out.

2. Seamless developer experience: Taiko’s use of ZK-EVM (Type 1 ZK-EVM) ensures compatibility with Ethereum execution standards, laying the foundation for a scalable Ethereum ecosystem foundation.

3. Highly adaptable and future-proof: As a controversial Rollup, Taiko empowers application chains to customize their proof systems and accept more efficient proofs as technology advances without the need for Modify Taiko's core protocol.

4. Strong community support: Taiko’s multiple testnets (Alpha1, Alpha2 and Alpha3) encourage community members to participate, and by interacting with the testnet, users can obtain air investment qualifications. This not only increases community activity, but also helps verify and optimize network design.

5. Extensive partners: Taiko has established strategic partnerships with a number of leading blockchain projects and companies to jointly promote the development of the ecosystem. These partners provide important support in technology research and development, marketing and community building.

Financing support

• Sufficient funding: Taiko has raised a total of US$37 million through multiple rounds of financing, including Lightspeed, Faction, Hashed It is supported by many well-known investment institutions including Generative Ventures and Token Bay Capital. Sufficient funds provide a solid guarantee for technology research and development, team expansion and infrastructure construction.

6.3 Insufficient projects

1. Market competition

• Fierce competitive environment: Expanding solutions in Ethereum Layer 2 In the field, there are many strong competitors, such as zkSync, StarkNet, Loopring, Optimism and Arbitrum. These projects are also actively developing their technologies and ecosystems, and Taiko faces fierce market competition pressure.

• Competitive advantage: Although Taiko has certain advantages in technological innovation and community building, how to stand out among many competitors is still a challenge.

2. Technical implementation

• Technical complexity: zkEVM and zkRollup technology itself is highly complex and requires a lot of R&D investment and Technical Support. There are still technical challenges to achieve fully decentralized and efficient zero-knowledge proofs.

• Mainnet release: Taiko’s mainnet is planned to be released at the end of the first quarter of 2024. Although multiple testnets have been successful, the smooth launch and widespread application of the mainnet still require Further verification.

3. User adoption

• User experience: Although Taiko provides many technical advantages, how to improve the user experience and attract more users and developers using its network remains an important topic. Especially in terms of user habits and compatibility of developer tools, continuous optimization is needed.

• Education and promotion: More education and promotion activities are needed to help users and developers understand and use the Taiko network, especially in complex zero-knowledge proof technology and decentralized governance model aspect.

7. Conclusion

In short, the Taiko project provides efficient, secure, and decentralized scaling solutions for Ethereum through innovative zkRollup and zkEVM technologies. With the support of multiple rounds of financing and the governance model of a decentralized autonomous organization (DAO), Taiko has made significant progress in technology research and development and community building. Despite market competition and technical challenges, Taiko is expected to occupy an important position in the field of blockchain expansion solutions by continuing to optimize technology and expand the ecosystem, providing users and developers with an efficient and secure blockchain environment.

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